Continued: Thomson Reuters adjusts to 'new normal'

The revelation last week that Thomson Reuters' legal division is cutting 60 of its 7,000 workers on the Eagan campus is the latest in a reduction of several hundred employees since 2009, thanks to the recession's impact on law firms, outsourcing some jobs to India and the Philippines and the continued shift from print to online legal resources.

The Minnesota Department of Trade and Economic Development said more than 425 employees were laid off from the company's legal and editorial services group between Jan. 1, 2009, and this past Oct. 31. Some of the departed qualified for federally funded retraining because their jobs were considered lost to foreign shores.

The recent headcount reductions ended a decade-long employment surge from 4,000 in 1998, when Thomson acquired West Publishing, to a peak of about 7,400 in early 2009. Part of the hiring resulted from information technology jobs added to support the legal division, as well as Thomson Reuters' globe-spanning tax/accounting, health care and financial information businesses.

"We have moved some content-production work to our global service centers in India and the Philippines," said John Shaughnessy, a Thomson Reuters official. "It's primarily keyboarding, data entry and some software testing. We're not just serving lawyers in the U.S., but in different parts of the world. We're trying to follow the sun in updating legal databases. We have Westlaw service in China and Japan. And we just acquired a legal publisher in India."

Shaughnessy pointed out that the Eagan campus of about 7,000 employees still boasts more than the 6,800 of four years ago.

The legal group had an operating profit decline of 9 percent in the first nine months of 2010, to $803 million, on revenue that increased 1 percent to 2.7 billion. The entire professional division's operating profit, including legal, declined by 6 percent, to $1.05 billion, on revenue that increased 2 percent to $4.1 billion during the first nine months of the year.

Last week, Thomson Reuters said it had acquired Pangea3, a fast-growing legal process outsourcing provider serving corporate legal departments and law firms. Pangea3, based in New York and Mumbai, India, has 650 employees, mostly in India.

It will be overseen by Peter Warwick, the Thomson Reuters Legal CEO based in Eagan, who called Pangea3 "a responsive, high-quality, transformative resource for a broad range of legal support work. This is particularly important as law firms and general counsels adjust to the realities of the 'new normal,' where efficiency, quality and responsiveness are paramount."

Thomson Reuters says it has sacrificed short-term profit margins to invest in the global legal-services business and is gaining market share on competitor LexisNexis.

"The Eagan campus will continue to be a primary center for our legal business," Shaughnessy said. "The legal editorial work on U.S. case law continues to be done by U.S.-based attorneys. We continue to make major investments in our core legal information business.''

Since WestlawNext was launched in February 2010 it has been sold to more than 9,000 customers, representing 18 percent of Westlaw's revenue base. "This is well ahead of the company's initial expectations,'' he added.

'Composite masonry'

Little Vast Enterprises, which makes lightweight building materials from shredded plastic bottles and tires, got a vast boost this week when it struck a deal with big Firestone Building Products Co., a unit of Bridgestone, the company that owns Firestone tires.

Vast CEO Andy Vander Woude estimates that the contract will add $10 million in business by 2015. Vast expects to post revenue of more than $1 million this year.

Firestone is the largest maker of commercial roofing materials, and Vast will be the exclusive manufacturer of Firestone SkyPaver composite roof pavers, a lightweight, low-energy alternative to clay, brick and concrete pavers in the booming "green roof" business. Building owners are trying to gain usable square footage and reduce expensive storm water runoff, heat loss and maintenance with rooftop gardens, playgrounds and tree-lined patios.

"The market for green roofs grew by more than 15 percent in 2009, and an estimated 10 million square feet of green roofs are now installed annually," said Riaz Hasan of Firestone. "Vast's technology provides a green paving solution for roofs that surpasses any other available today."

Vast, of northeast Minneapolis, is capitalized by $2.5 million invested by individuals. Vast plans to raise another $2 million by the end of the first quarter of 2011 to invest in the Firestone-related expansion.

Vast expects to double its headquarters staff to nearly 20 over the next few years and increase orders through its contract manufacturers.

"We've developed our proprietary technology and we call it 'composite masonry''' for pavers, walls and roofs, said Vander Woude.

By using 95 percent recycled content, the products take 90 percent less energy to manufacture and are one-third the weight of concrete. That makes it easier to get products up on the roof.